The state's February election is getting attention for the possibility that California may affect the outcome of the presidential campaigns.
But the election is getting particular attention from businesses which are divided on whether to support several key measures.
The Feb. 5 ballot features issues as diverse as tribal gaming compacts and community college funding formulas some of which will affect businesses directly and others that will be more indirect in impact. As such, the state and local business communities are split on the proposals.
"Business is all over the map in this election," said Robert Stern, president of the Center for Governmental Studies, a Los Angeles-based public policy and political reform organization. "And even on those measures that do impact business, like the telephone tax, many businesses take stands or make donations to stay on the good side of elected officials."
The February ballot is lighter than some recent statewide elections when it comes to business issues. For example, there's no employer mandate to provide health care coverage as there was in November 2004. And there are no tax increases aimed at specific industries such as tobacco or oil.
Indeed, elections with more impact on bottom lines are likely in June, when competing eminent domain measures will be up for a vote, and in November, when Californians could be voting on another health care reform measure that would require business owners to provide employee coverage.
Even so, the upcoming February ballot includes seven important statewide propositions: four Indian gaming compacts, a gasoline sales tax measure, a minimum guarantee for community college funding and a term limit reform measure.
Television ad wars have already begun over the tribal gaming compacts, which are opposed strongly by the operator of Hollywood Park and other local racetracks.
These four referenda, Propositions 94 to 97, were placed on the ballot by labor unions, racetracks and other opponents of deals reached between Gov. Arnold Schwarzenegger and four Indian tribes. If a majority of voters vote "no," the compacts would be voided.
The deals, approved by the Legislature last fall, would allow the Pechanga Band of Luiseno Indians, the Sycuan Band of the Kumeyaay Nation, the Agua Caliente Band of Cahuilla Indians and the Morongo Band of Mission Indians to add 17,000 slot machines to the 8,000 they run in their casinos, generating billions of dollars in additional state revenues over the next 23 years. How much revenue is in dispute: Estimates range from $5 billion over 23 years to $20 billion.
The four Indian tribes, from San Diego and Riverside counties, have raised $30 million and spent more than $10 million in ads touting the additional revenue and services the deals would generate. Opponents of the compacts including unions that failed to extract labor concessions from the tribes, anti-gaming groups and racetrack operators have raised roughly $12 million to date.
About half of that sum has come from Stockbridge Real Estate Fund LP, which owns the Hollywood Park racetrack in Inglewood and the Bay Meadows racetrack in San Mateo County. Bay Area real estate investor Terrence Fancher is the general manager of Stockbridge.
The racetracks' main concern is language in the compacts that prohibits them from installing certain types of gaming devices, including video lottery terminals, that are common at tracks in other states. The revenue from those terminals allows the tracks to offer richer purses, which draw better fields and more interest from bettors.
"Hollywood Park and Bay Meadows are concerned that the compacts as currently drafted will limit their ability to compete with horse racing in other states," said Greg Larsen, a spokesman for the tracks. "The compacts will for more than 20 years not allow them to look at other kinds of alternative gaming or revenue streams to support race purses as tracks do in other states."
However, supporters including the California Chamber of Commerce and numerous local chambers say the compacts will bring in much needed revenues to the state. That's become a bigger concern as a slowing economy has California facing a possible $14 billion deficit in the 2008-09 fiscal year.
"The Indian casinos generate more taxes for us, which are really needed right now for the budget deficit we're having. If we don't get the budget balanced, then we're afraid businesses will have to pay more fees or taxes to close that gap," said Hugo Merida, president of Los Angeles Hispanic Metro Chamber of Commerce, which has about 650 member companies.
A Field Poll taken last month shows 39 percent of likely voters approving the compacts, 33 percent opposed and 28 percent undecided.
Term Limit Scuffle
Even more controversial on the Feb. 5 ballot is a proposed overhaul of term limits. Under the current system, lawmakers can serve six years in the Assembly and eight years in the Senate. Passed by voters in 1990, the law was a Republican attempt to curb the power of then-Democratic Assembly Speaker Willie Brown.
These limits, especially the six-year cap for Assembly members, have come under fire from policymakers who contend the restrictions have stripped the Legislature of its institutional memory and turned Sacramento into a game of musical chairs, with lawmakers focused on their next elected office.
The term limits measure on the February ballot was supposed to be paired with a redistricting reform measure, functioning as the "carrot" to redistricting's "stick." But redistricting bogged down amid opposition from Democrats, and especially from members of Congress concerned about losing their nearly de-facto lifetime seats. That just left the term limits overhaul, under which the total number of years a state legislator can serve is reduced to 12 from the current 14. But lawmakers can choose to serve all 12 in one house.
The catch: The proposition as worded applies to 34 current lawmakers due to be termed out next year. That would allow Assembly Speaker Fabian Nu & #324;ez to remain in the Assembly another six years and Senate President Don Perata to remain in the Senate an additional four. This has prompted opponents to tag the measure the "Nu & #324;ez and Perata Term Extension Act."
In last month's Field Poll, support remained steady at 50 percent, indicating that a close vote is likely.
Business groups have generally been supportive of the concept of extending term limits, especially when paired with redistricting. The believe changing the redistricting process would make seats more competitive, resulting in a more moderate Legislature better capable of crafting compromise bills on a variety of issues. But they appear to be lining up against this measure, largely because it lacks the redistricting component.
Indeed, the California Chamber of Commerce last month reversed its position. Nearly a year ago, the group supported the term limits proposal; but the lack of a redistricting measure caused it to reconsider.
"It is unfortunate that the February ballot does not offer voters the opportunity to consider redistricting reform that would provide for fair elections in conjunction with Proposition 93," said Allan Zaremberg, chief executive of the California Chamber of Commerce. "Term limits reform without redistricting reform is not the comprehensive political reform California needs."
That view was echoed by the Valley Industry and Commerce Association, which in November also voted to oppose the measure. The Los Angeles Area Chamber of Commerce is due to take up the initiative later this month.
So far, the California Small Business Association is the only statewide business group to come out in support of the term limits reform measure. "Legislators can perform better when they have a chance to be there for a little longer period of time," association president Betty Jo Toccoli said at a recent legislative hearing on the issue.
Meanwhile, the Valley Industry and Commerce Association has split with the state's broader business community on ballot measure Proposition 92, which requires that 10 percent of the education budget be permanently set aside for community college funding. The initiative has generated strong opposition from advocates of K-12 education who fear that they will lose funds.
The California Chamber of Commerce in September voted to oppose Proposition 92, contending that the guaranteed funding could hurt other vital state programs in education, health and public safety.
But the Valley Industry and Commerce Association is supporting the initiative.
"Our board members felt that, while there is an issue of diverting funds, community colleges are vital for workforce development and should receive a guaranteed level of funding," said VICA Chief Executive Brendan Huffman.
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